Editorial: A Shortfall of Candor in Raleigh

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The Charlotte Observer is out with an editorial blasting Rep. Skip Stam for his blatantly false claims that there isn't a budget shortfall this year. The editorial equates Stam's attempt to hide the truth with George Orwell's 1984 government that said 2+2=5. 

From the editorial,

Politicians spin. That’s not news. But Rep. Paul Stam’s spin this week was unusually brazen. He even accompanied his spin with “proof,” but the proof just showed he was spinning.

Stam, a Republican from Apex and the House Speaker Pro Tem, issued a statement Thursday.

“We read numerous editorials decrying the revenue ‘shortfall’ this year,” Stam said. “… There is no revenue shortfall. There is a shortfall only of expectations on the part of those who want to grow state government.”

He attached a Feb. 10 memo from the legislature’s Fiscal Research division and the Office of State Budget and Management to support his argument. That’s where he runs into a problem. While Stam says there is no shortfall, the memo refers to the state’s $271 million shortfall three times.

“The anticipated shortfall is predominantly the result of slower than expected wage growth,” the memo from Barry Boardman and Nathan Knuffman says. “… The result is an estimated revenue shortfall of $271 million below the $21 billion budgeted amount for the current fiscal year.”

Here are the facts: The legislature approved a budget for 2014-15 of $21 billion. The state now expects to collect $271 million less than that. That’s the shortfall. The state budgeted about $857 million more in revenue than it did in 2013-14. Now it expects to take in about $586 million more. So Stam claims there is no shortfall because overall revenues are up.

Three thoughts:

• However Stam slices it, the budget year is almost two-thirds over and the state has a $271 million gap it has to cover.

• Would Stam consider it a revenue shortfall if it were his household budget rather than the state budget? Let’s say he bought a new house and his mortgage went from $1,000 a month to $1,500 a month. Then the money he has for his mortgage climbs from $1,000 to $1,300. Would he say there is no shortfall because his overall revenue is up? The bank would beg to differ. 

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